Plan uses GPS to tax drivers at the pump

Road user fees, not tolls, could replace or supplement declining gas tax revenues.

With imposition of a toll on the second Tacoma Narrows bridge imminent, and the likelihood of others to finance other construction in Washington, the State of Oregon is taking a different approach.

The state’s Department of Transportation last month completed a one-year test of user fees, which substitute distance traveled for gasoline consumed when calculating how much the driver pays at the pump. The system will help maintain or increase highway funding despite growing numbers of vehicles that burn less gas, and so pay lower taxes.

In Oregon, says James Whitty, state gas tax income slipped from $385 million in 2004 to $374 million in 2005. Federal highway dollars also fell.

Whitty, who manages the department’s Office of Innovative Partnerships and Alternative Funding, says the decline is not expected to continue in the near term. But in another decade officials expect gas tax revenues to fall off a cliff from which they will never recover. Meanwhile, Oregon faces $10 billion in unfunded highway projects.

Oregon’s state gas tax has been stuck at 24 cents per gallon since 1993. Voters in 2000 overwhelmingly rejected a proposed increase. In 2001, the Legislature authorized the department to start looking for another way to fund transportation infrastructure.

Whitty says a Road User Fee Task Force sorted through 28 different ideas before trying a system developed by Oregon State University that relies on GPS technology to calculate distance traveled. The state equipped 260 vehicles with devices that receive a satellite signal. A small transmitter tells a receiver at the gas pump how far the vehicle has traveled, but not where, a major concern of privacy advocates.

Instead of collecting a gas tax, the pump charges the driver 1.2 cents per mile, roughly equivalent to 24 cents per gallon for a vehicle that gets 20 miles per gallon. Two gas stations in Portland were equipped with the special receivers.

The vehicles were also fitted with screens that told drivers whether they were in Portland, in Oregon, outside the state, or not receiving the GPS signal, which usually happened in parking garages. Just for test purposes, Whitty says, a group of “rush hour” drivers was charged a reduced mileage rate except between 7-9 a.m. and 4-6 p.m., when the rate soared to 10 cents per mile.

“We wanted to test their behavior,” he says, but not have them pay more overall than the other group.

Although the department has just begun to analyze test results, Whitty says the only apparent hitch were occasional communication problems between some vehicles and the pumps. Some types of vehicles were more difficult to retrofit with the OSU technology than others, he says.

Also, the system drained the batteries on some vehicles when they were not being driven.

Those problems would be solved if automakers installed GPS devices on all vehicles. The industry can ignore Oregon, he says, but Minnesota, Colorado and Texas are also exploring the technology. U.S. Secretary of Transportation Mary Peters saw the user fee technology demonstrated during a visit to the state last fall, and the governments of Japan, Germany and other nations have shown interest.

Also, notes task force Administrator Betsy Imholt, Oregon’s system has been praised in a bond industry publication, which said fees represent a sound method of repaying debt issued to build new roads or bridges.

That, and support from Washington, D.C., could make road user fees a reality.

“We’ll have to have the support of the U.S. Department of Transportation to make it happen,” Whitty says.

The last constituency to buy in may be the public, which dislikes high gas taxes, hates tolls, but distrusts unfamiliar technology. Drivers of high-mileage vehicles may be especially resistant, Whitty says, even though they cause the same wear and tear on pavement as conventionally powered cars and trucks.

Until much-needed highway projects languish for lack of funding, many drivers will stay in the pass lane when asked to pay more to travel.

“Until the public understands the problem, they won’t accept the solution,” he says.

Whitty says tolls remain an option if the user fee does not fly. Oregon, like Washington, could impose a toll to pay for new Interstate 5 bridges over the Columbia River.

But other studies are also leaning towards mileage-based fees as the preferred alternative to the gas tax, he says. Better technology is already on the way.

If user fees do indeed turn out to be the future of highway funding, Oregon will be able to say it went down that road first.